New leader’s promises will be tricky to keep in hard-up Sri Lanka

Stunning election wins by a new left-leaning president and his party have changed Sri Lanka’s political landscape – but the cash-strapped island’s new rulers are quickly realising that campaign promises are easier to make than to keep.

Anura Kumara Dissanayake’s remarkable victory in the presidential election in September was swiftly followed by a landslide for his National People’s Power (NPP) alliance in parliamentary elections.

As a new year starts, he and his supporters want this to be a turning point for the country, which is trying to recover from devastating economic crisis and years of misrule.

However, they have limited room for manoeuvre to make good on pledges to voters, whose expectations from the new government are high.

Since the financial meltdown of 2022, economic recovery has been fragile and Sri Lanka is far from out of the woods.

The NPP won 159 seats in the 225-member assembly in November – an unprecedented two-thirds majority – giving Dissanayake a sweeping mandate to push through major economic and constitutional reforms.

However, even as the results were coming in, the new president had to gear up for a meeting with a visiting delegation from the International Monetary Fund (IMF), with which the outgoing government had negotiated a $2.9bn (£2.31bn) bailout package.

The IMF deal became controversial as it led to severe austerity measures, tax rises and cuts in energy subsidies – hitting common people hard.

During the campaign Dissanayake and his alliance promised that they would re-negotiate parts of the IMF agreement.

But in his address to the new parliament, he performed a U-turn.

“The economy is in such a state that it cannot take the slightest shock… There’s no room to make mistakes,” Dissanayake said.

“This is not the time to discuss if the terms [of the IMF loan] are good or bad, if the agreement is favourable to us or not… The process had taken about two years, and we cannot start all over again.”

The voters’ overwhelming verdict for the NPP is seen as the culmination of a people’s uprising triggered by the economic crisis. The uprising toppled president Gotabaya Rajapaksa in the summer of 2022, when Sri Lanka ran out of foreign currency and struggled to import food and fuel.

The country had earlier declared bankruptcy after defaulting on its external debt of about $46bn. India, China and Japan are among those who have loaned billions of dollars.

The recent election results also reflected people’s anger towards established political parties – of former presidents Mahinda Rajapaksa and Ranil Wickremesinghe and others – for failing to handle the economic meltdown.

“One of the priorities for Dissanayake will be to give some economic relief to the people due to excessive taxation and the cost-of-living crisis. Debt management is another big challenge,” veteran political analyst Prof Jayadeva Uyangoda told the BBC.

So far the massive political changes don’t seem to have had any impact on people like Niluka Dilrukshi, a mother-of-four who lives in a suburb of the capital Colombo. Her husband is a daily-wage labourer and the family still find it hard to get by.

The BBC spoke to her about the soaring cost of living in January 2022, months before mass protests erupted.

At that time, she said her family was eating only two meals a day, instead of three, and they were giving only vegetables and rice to their children due to the high cost of fish and meat.

“We are still struggling to make ends meet and nothing has changed. The price of rice, which is the staple food, has increased further. We are not getting any relief from the government,” Mrs Dilrukshi says.

People like her want the new government to take immediate steps to bring down the cost of essentials. Sri Lanka is an import-dependent nation, and it needs foreign currency to bring in items like food and medicine.

For now, Colombo is able to hold on to its currency reserves as it has suspended its debt repayments.

The real struggle, experts point out, will start probably in the next three or four years when it starts repaying its debt.

People’s perception of President Dissanayake and his new government could change if there’s no visible change in their standard of living in the next two or three years.

“People have given him a huge mandate. The IMF should respect that by allowing him to give some relief to the people through social welfare programmes,” says Prof Uyangoda.

Dissanayake must also contend with India and China, which are jostling for influence in Sri Lanka, where both have invested heavily in recent years.

“Both India and China will try to bring Colombo under their sphere of influence. I think the new government’s foreign policy will be very pragmatic without aligning with anyone,” says Prof Uyangoda.

In a careful diplomatic manoeuvre, Dissanayake chose Delhi as his first official overseas destination in mid-December. During the visit, India promised to supply liquefied natural gas for Sri Lankan power plants and work on connecting the power grids of the two countries in the long run.

China’s increasing foothold in Sri Lanka, especially calls by Chinese “research” vessels to the island’s ports – so close to India’s southern tip – has triggered concern in Delhi.

“I have given an assurance to the prime minister of India that we will not allow our land to be used in any way in a manner that is detrimental to the interest of India,” Dissanayake said after talks with Narendra Modi.

Delhi will no doubt be pleased with the assurance, but Dissanayake will find out what Beijing expects when he visits China in mid-January.